Another Job Lost, Another Short Sale—Long Grove

List Price: $799,900Sale Price: $799,000The Property: Set on nearly an acre in Long Grove, this 11-room house sold Thursday for 63 percent of the $1.25 million that its sellers had paid for it new in 2005.

By Dennis Rodkin

Published Sept. 20, 2010

List Price: $799,900Sale Price: $799,000The Property: Set on nearly an acre in Long Grove, this 11-room house sold Thursday for 63 percent of the $1.25 million that its sellers had paid for it new in 2005. The sellers, who are not clearly identified in files at the Lake County Recorder of Deeds, were selling because the husband’s company went out of business, says their agent, Marc Shudnow.

A Re/Max agent who for a decade has specialized in short sales (where the listing price is less than the amount of the mortgage), Shudnow says that job loss is now the top reason for short sales. “The first set [of short sales] was people in economically stressed neighborhoods who were struggling to make ends meet,” he says. “Then we saw the people who were just too much in debt and couldn’t keep using their homes as ATMs. Now it’s people who are out of work. Until the jobs [situation] is fixed, we’re going to see a lot more.”

The house has four bedrooms, four-plus baths, custom millwork, and according to Shudnow, a gigantic kitchen. It’s in Prairie Trails, a Long Grove subdivision of curving streets and large homes that overlook conserved prairies, ponds, and gravel walking paths. Most of the homes were built in the first half of this decade on large lots with extensive landscaping.

The house had been on and of the market since May 2008, starting at $1.34 million and dropping in stages until it reached $799,900 in March 2010. The mortgage, which was held by JP Morgan Chase, was more than $1 million, Shudnow says. Once the price hit $799,900, the home sold quickly to a couple that had been shopping short-sale listings to find a bargain. Because the buyers had to sell their existing home, they postponed closing on this one until September 14th, Shudnow says. Because he has been handling short sales for so long, I asked Shudnow about a bill introduced in Congress last week that would require banks to respond to short-sale requests within 45 days. The bill’s sponsors say that it would unclog the short-sale system and help sellers and buyers avoid months of delays.

“The banks simply do not have enough time to do everything they have to on a short sale in 45 days,” Shudnow says. “That limit is dumb. It won’t help anybody. What the banks will do is just deny any offer [in order to meet the deadline].” Instead, he would like to see holders of second mortgages receive cash incentives to get out of the way of a short sale.

Price Points: While the buyers snapped up a bargain, Shudnow acknowledges that “their neighbors may not be very happy” about what this sale will indicate about their own homes’ values. At least three other homes in the subdivision are on the market now priced from $1.149 million to $1.499 million. While today’s house shows some signs of deferred maintenance—weedy landscaping and some damage to copper accents—it is generally in move-in condition, Shudnow says.